Taxi drivers are struggling to make a living in Birmingham because there are too many licensed cabs on the roads, according to a new study.
Research carried out for the city council found an ample supply of vehicles, even at the busiest times in the city centre on Friday and Saturday nights.
At less busy times there is an over-supply of taxis resulting in congestion around ranks and frequent parking fines handed to drivers.
But the council is likely to resist demands by taxi associations to stop the granting of new licences, which is running at about 70 a year.
The number of taxis operating in Birmingham has risen steadily since the trade was de-regulated, climbing from 770 in 1997 to 1,339 today.
Council officials fear that any attempt to restrict the number of taxis would result in legal action from cabbies who were refused licences.
It is proposed instead to reduce the number of cabs by imposing tougher quality controls and banning any vehicles over seven years old.
A report to be considered by the Licensing Committee calls for a more rigorous policy of safety checks for both taxis and private hire cars.
Vehicles up to three years old would be tested twice a year and vehicles between three and five years old would be checked three times a year.
The survey, by Social Research Associates, states: "As with all taxi use, demand is uneven but observations show that even on Broad Street in the small hours of Friday night there is a good supply of hackneys and private hire."
The report notes that drivers, who claim it is impossible to earn a living wage, are facing increased fuel and insurance costs which are eating into profitability, while the over-supply of vehicles means that the annual average mileage of taxis in Birmingham is only 30,000 compared with a national average of 60,000.
The traditional response of the trade has been to seek increased fares, making Birmingham the sixth most expensive place in the UK to hire a taxi.
The report adds: "The Hackney trade have made it quite clear that in view of the research finding of no unmet demand, they would like a halt to the issuing of further licences. This would be a bold option in view of the strength of national policy guidance against numbers control, including the Office of Fair Trading, Government guidance and other consumer organisations such as the National Consumer Council."
The report suggests reducing the number of taxis through tougher quality controls rather than ceasing to issue licences would be more beneficial to the public in terms of "driver training, air and vehicle quality".
Birmingham and Solihull Taxi Association representative Mike Shingler said the recommendation that the granting of new licences should continue unabated was a "contradiction in terms".
Mr Shingler said the gut instinct of most cabbies was to refuse new applications, particularly when trading conditions were so tough.
He added: "The council is saying there are too many cabs but they don’t think it is the way forward to stop issuing licences.
"By any standards, it’s tough out there. We have a recession on and we are paying £1.32p a litre for diesel.
"In other words, a milk bottle-full of fuel costs £1."
Stricter regulation of vehicles, including proposals to carry out more safety checks, were pushing up drivers’ overheads even more, Mr Shingler added.
He said: "Until recently, a driver would spend £20 to earn £100. Now he is spending £30 to earn £100 and having to pay for two or three tests a year. It is a colossal expense to run a taxi these days."
Jacqui Kennedy, Director of Regulatory Services at the city council, said it would be a retrograde step for the local authority to impose a limit on the number of taxis licensed to operate in Birmingham. However, she did not rule out the possibility that the council could impose a short-term moratorium on the granting of licences.